State of the Sector Report 2023

STATE OF THE SECTOR 2023 Worker Cooperatives & Democratic Workplaces in the U.S.

Learn more at institute.coop/sots2023

TAKE A PEEK INTO THE U.S. WORKER CO-OP & DEMOCRATIC WORKPLACE LANDSCAPE

751 Known Worker Cooperatives Worker cooperatives have grown by more than 20% in the past two years and tripled over the past decade. The 751 worker cooperatives and democratic workplaces referenced here were identified during the 2023 Economic Census. We estimate there are closer to 1,300 worker cooperatives, many of which are startups.

WORKER COOPERATIVES AND DEMOCRATIC WORKPLACE GROWTH Worker cooperatives and democratic workplaces have experienced concentrated growth over the past decade. The increasingly popular business form is providing wealth-building opportunities, safer workplaces, living wages, and agency for workers across the U.S. The data presented here represents results of the 2023 Economic Census of Worker Cooperatives and Democratic Workplaces, conducted

by Democracy at Work Institute and the U.S. Federation of Worker Cooperatives. This year’s data completes a decade of research on worker-owned businesses. The business-specific data presented here represents survey responses from 172 firms.

THE WORKERS RACE

ETHNICITY

White 53.74% Hispanic /Latine 51.7%

Not Hispanic or Latine 48.3%

GENDER

Another Race 7.99%

Black or Middle African Asian or Native Eastern or American Pacific American Arabic 28.35% Islander 2.45% 2.05% 5.42%

Women 73.99% Another Gender .23%

OF MEMBERS

IN CO-OPS

Worker cooperatives and democratic workplaces prioritize the reduction of internal inequality over other compensation goals. While pay ratio in cooperatives is 1 : 1.45, the pay ratio in large US corporations averages 1 : 344. This is according to the Economic Policy Institute (2023).

Pay Ratio in Co-ops Producers 3.6%

Other 5.4%

Investors 6% Consumers 6%

Non Binary 3.07%

PAY RATIO

MULTIPLE TYPES

Cooperatives are businesses designed to provide direct benefit to their members. 1 in 5 reported having multiple member classes, indicating innovation within the field, meeting the needs of workers and their communities to include classes such as consumers which broaden the stakeholders to a wider community - and investors - which allow for additional financing.

Men 22.72%

Workers - Only 79%

1 Lowest Paid Worker

Pay Ratio in Conventional Businesses

1.45

1

Highest Paid Worker

Lowest Paid Worker

344 Highest Paid Worker

* Median wage is determined by figures our 172 survey respondents reported. It should be noted that wages vary based on firm industry and location.

THE WORKPLACE HOW THEY ORIGINATED Business conversions, also referred to as ownership transitions, continue to grow in prevalence.

While our previous census reported between 10% - 20% of respondents transitioned to a worker cooperative model, nearly a third of this year’s respondents were conversions.

Conversion 31%

Startup 69%

TOP 5 INDUSTRIES

TODAY

Food & Beverage (Ex. Restaurants)

LEGAL FORMS USED

BY BUSINESSES

Worker cooperatives and democratic workplaces use a variety of legal forms upon incorporation, but the limited liability company is by far the most common. The most common legal forms used by conventional firms are sole proprietorship, partnership, corporation and s-corporation.

The tops 5 legal forms used by co-ops are: LLC - 41.82% Worker Cooperative - 30.30% C-corp - 10.30% Other Cooperative Corporation - 4.24% S-corp - 3.64%

FINANCIAL$ Gross Revenue* - $483,285,529 Median Firm Revenue - $607,081 Median Firm Age - 9 Years Median Firm Size - 6 Workers

Business Support Services

Food & Beverage (Agriculture)

Cleaning Services

Engineering & Manufacturing

GROWTH THROUGH

THE DECADES

Businesses exist in an array of industries and the rate of startups remains steady. As shown by the growing percentage of ownership transitions and the large number of cooperatives started in the 2010s, the number of older firms is growing, potentially suggesting the model’s longevity and an increase in business support services.

Percentage of Current Firms by decade started 40 % 30 % 20 % 10 % 0%

1980

*Gross revenue is a total estimate we create of the total revenue of all the 751 firms.

1990

2000

2010

2020